13.5.6

Williams Optical Inc. is considering a new lean product cell. The present manufacturing approach produces a product in four separate steps. The production batch sizes are 45 units. The process time for each step is as follows:

Process Step 1	5 minutes
Process Step 2	8 minutes
Process Step 3	4 minutes
Process Step 4	3 minutes

The time required to move each batch between steps is 5 minutes. In addition, the time to move raw materials to Process Step 1 is also 5 minutes, and the time to move completed units from Process Step 4 to finished goods inventory is 5 minutes.

The new lean layout will allow the company to reduce the batch sizes from 45 units to 3 units. The time required to move each batch between steps and the inventory locations will be reduced to 2 minutes. The processing time in each step will stay the same.

Determine the value-added, non-value-added, and total lead times, and the value-added ratio under the present and proposed production approaches. If required, round percentages to one decimal place.

	Present Approach		Proposed Approach
Value-added time	___	min	___	min
Non-value-added time	___	min	___	min
Total lead time	___	min	___	min
Value-added ratio (as a percent)	___	%	___	%

Williams Optical Inc. manufactures eye glasses. Each pair requires $119 per unit of direct materials. The manufacturing assembly cell includes the following estimated costs for the period:

Glass assembly cell, estimated costs:
Labor	$50,330
Depreciation	6,750
Supplies	2,460
Power	1,840
Total cell costs for the period	$61,380

The operating plan calls for 165 operating hours for the period. Each pair requires 15 minutes of cell process time. The unit selling price for each speaker is $322. During the period, the following transactions occurred:

1. Purchased materials to produce 395 speaker units.
2. Applied conversion costs to production of 375 glass units.
3. Completed and transferred 360 speaker units to finished goods.
4. Sold 345 speaker units.

There were no inventories at the beginning of the period.

a. Journalize the summary transactions (1)-(4) for the period. Round the per unit cost to the nearest cent and use in subsequent computations. If an amount box does not require an entry, leave it blank.

1.	Raw and In Process Inventory	___	__
	Accounts Payable	___	__
2.	Raw and In Process Inventory	___	___
	Conversion Costs	___	___
3.	Finished Goods Inventory	___	___
	Raw and In Process Inventory	___	___
4. Sale	Accounts Receivable	___	___
	Sales	___	___
4. Cost	Cost of Goods Sold	___	___
	Finished Goods Inventory	___	___

b. Determine the ending balance of raw and in process inventory and finished goods inventory.

Raw and In Process Inventory, ending balance	___
Finished Goods Inventory, ending balance	___